The TMCA

On January 29, the U.S. Copyright Office released Part 2 of its planned 3-part report on the legal and policy issues related to copyright and artificial intelligence (AI). Part 1 of the report, which was published in July 2024, addressed the topic of digital replicas. Part 2 now addresses issues related to the copyrightability of generative AI model outputs. The highly anticipated Part 3 is slated to address copyright infringement and fair use issues involving generative AI. Generative AI Models (Generally) Generative AI models are machine learning models that, when given an instruction or request (a prompt), can generate new content such as text, images, videos, and sounds. Prompts are often textual, but can be other input, such as images. These models learn the underlying patterns and structures of their training data and use them to produce new data based on the prompt. Examples include Meta’s Llama models, OpenAI’s ChatGPT models, and Google’s Imagen 3 model. The creation of prompts themselves has developed into its own category of computer technology—many in the field have begun using generative models to develop large amounts of prompts or to develop optimized prompts. Due to the rising use of these generative AI models, the Copyright Office is publishing guidance addressing issues of copyright law uniquely applicable to AI models. Historical Copyright Law Gives Some Guidance The Copyright Office began Part 2 of its report by explaining how copyright law has kept up with changes in technology, particularly with the inventions of photography, movies, and video games. As technology evolves, the Copyright Office and courts must decide to what extent technology can be involved in works of authorship that can still claim copyright protection. Because technology has always been permitted to be used in generating copyrighted works, the Copyright Office explained that there cannot be a bright-line rule “that registration will be denied merely because a computer may have been used in some manner in creating the work.” Instead, the analysis involves a case-specific sliding scale: “Where AI merely assists an author in the creative process, its use does not change the copyrightability of the output. At the other extreme, if content is entirely generated by AI, it cannot be protected by copyright.” As discussed by the TMCA in the past, the U.S. Supreme Court and the Copyright Office have long held that authorship requires the involvement of human creativity. The crucial question is “whether the ‘work’ is basically one of human authorship, with the computer [or other device] merely being an assisting instrument, or whether the traditional elements of authorship in the work (literary, artistic, or musical expression or elements of selection, arrangement, etc.) were actually conceived and executed not by man but by a machine.” U.S. Copyright Office, Report to the Librarian of Congress by the Register of Copyrights (1965). The Copyright Office also analogized the generative AI model issues to other topics already decided in the law. For example, cases involving commissioning works, where courts have analyzed what level of contribution is necessary to qualify as authorship, seem applicable. A person who merely describes to an author what the commissioned work should do or look like is not a joint author for purposes of the Copyright Act, because such contributions constitute unprotectible ideas. Likewise, a person who provides high-level guidance to a generative AI model would also have difficulty proving sole or co-authorship. Specific Examples Provided by the Copyright Office The Copyright Office offered a few examples to illustrate the boundaries of copyright protection for material produced (at least in part) by generative AI models. Prompts On one end of the spectrum, prompts alone do not provide sufficient human control to make users of an AI system the authors of the output. “Prompts essentially function as instructions that convey unprotectible ideas.” The Copyright Office provided its own generative example to illustrate its point: While this prompt is very descriptive, and the resulting image reflects some of the instructions, it does not reflect all of them (there is no “highly detailed wood”). The generative AI model also uses its own content to fill in gaps (the cat’s breed, clothes beneath the robe, human hands, etc.). The Copyright Office noted that identical prompts can generate multiple different outputs, which further underscores the lack of human control. This reality may change as technology evolves. “There may come a time when prompts can sufficiently control expressive elements in AI-generated outputs to reflect human authorship. If further advances in technology provide users with increased control over those expressive elements, a different conclusion may be called for.” But for now, the Copyright Office’s position is clear: prompts are not copyrightable. Expressive Inputs Expressive inputs are inputs of copyrighted works into generative AI models with instructions to modify those works. For example, a human author may create a drawing, input that work into an AI system, and instruct the system to modify color or scale. Or a user could upload a copyrighted story written in the first person point of view, and instruct the model to re-write the story from that of a third person. These inputs are different from prompts because they contribute more than just an intellectual idea. The Copyright Office again provided its own example: Here, the Copyright Office appears more inclined to provide protection, though that protection would not cover the entire output. Instead, “copyright in this type of AI-generated output would cover the perceptible human expression.” Modifying or Arranging AI-Generated Content Finally, the Copyright Office addressed situations where a generative model is used as an initial step, but the author further modifies the output. The Copyright Office noted that whether or not such modifications rise to the minimum standard of originality, that is, whether the work is the product of creative choices with respect to the selection of the images and/or text that make up the work and the placement and arrangement of the images and/or text on each of the work’s pages. The copyright would extend to the material the human author contributed but would not extend to the underlying AI-generated content itself. The inclusion of elements of AI-generated content in a larger human-authored work does not affect the copyrightability of the larger work as a whole. “For example, a film that includes AI-generated special effects or background artwork is copyrightable, even if the AI effects and artwork separately are not.” Key Takeaways The key takeaways from Part 2 of the report include how the Copyright Office interprets the human authorship requirement as it relates to the use of models. The Copyright Office explained that “[c]opyright protects the original expression in a work created by a human author, even if the work also includes AI-generated material,” but “[c]opyright does not extend to purely AI-generated material, or material where there is insufficient human control over the expressive elements.” Whether the human interaction with the generative AI model is sufficient to constitute authorship should be decided on a case-by case basis. In the words of the Copyright Office: “prompts do not alone provide sufficient control.”

The crinkle sound of the gold foil. The rich smell of honey and almond. The unique design of peaks and valleys. And the delicious taste of Swiss chocolate. There is little doubt that since its creation in 1908, Toblerone-branded chocolate has made a name for itself in the chocolate world. But one of its original and defining characteristics has recently been cast into doubt—its “Swissness.” In 1868, Jean Tobler opened a confectionery shop in Bern, Switzerland that was an immediate success and grew into a chocolate factory by 1899. A decade later, Jean’s son, Theodor Tobler and his cousin, Emil Baumann, invented a unique and innovative chocolate bar, a special recipe of milk chocolate, almond-based nougat, and honey formed into a distinct triangular shape. Theodor named this new confection “Toblerone,” a combination of his last name, “Tobler,” and “Torrone,” the Italian word for honey and almond nougat. The chocolate bar’s popularity and international recognition only grew from there, including a feature at the 1964 World’s Fair in New York City and the Expo in Montreal in 1967. In 1969, different varieties of the chocolate where introduced, and in 1970, the now infamous packaging was changed to add a depiction of the Matterhorn in the Swiss Alps, Switzerland’s highest and most famous mountain. Since this time, packages of Toblerone has included various indicators that the chocolate bars were manufactured in Switzerland, including the Matterhorn icon and statements like “of Switzerland,” and “Swiss milk chocolate.” Until recently, Toblerone was undoubtedly “Swiss,” as every chocolate bar bearing the Toblerone name since 1908 has come from Switzerland. But in late 2022, Mondelez International, the now owner of Toblerone, announced that some—but not all—of the chocolate bar’s production would be moved from its location in Bern, Switzerland to Bratislava, Slovakia in July 2023. And this decision has cost it its “Swissness.” Effective January 1, 2017, the Swiss government enacted legislation to protect the “Swissness” of the goods and services emanating from the country, with the goal of protecting the “excellent reputation” Swiss indicators of source enjoy both domestically and abroad. The legislation regulates the “Made in Switzerland” statement, the Swiss cross designations, and images of the iconic Matterhorn mountain, all of which the Swiss government views as part of the overarching Swiss brand. The Swiss government notes that “Swiss products and services are associated with exclusivity, tradition and quality, with their goods reputation inspiring confidence in the product or service in question and ultimately influencing the consumer’s buying decision.” As an added benefit, strict regulation surrounding these Swiss designations provide a clear competitive advantage for manufacturers and service providers who are able to demand a higher price for their “Swiss”-branded fares. This law stems from an intellectual property principal recognized in Europe and elsewhere in the world, but not in the United States, known as “geographic indicators.” Geographic indicators, which we have previously written about, are used to label products that directly specify a product’s particular geographic origin, like “champagne” from France or “parmigiano reggiano” from Italy. Technically speaking, sparkling wine from California cannot bear the “champagne,” “prosecco,” or “cava” labels, nor can cheese from Wisconsin be called “gouda” or “feta.” Certain geographic indicators can be registered under the European Community regulations, which in turn confers certain exclusive rights to the registered owner and protects the association of certain food and beverage characteristics within that particular geographic region. The 2017 “Swissness” law falls under this geographic indictor of intellectual property protection. Anyone wishing to use a “Swiss” designation on products or in connection with rendered services must meet strict criteria in proving they are “Swiss” enough. As is relevant to Toblerone’s confections, to qualify as “Swiss,” at least 80% of the raw materials used to create foodstuffs must originate in Switzerland. However, for milk and dairy products in particular—under which chocolate falls—the weight of milk as the raw material must equal 100%. Further, essential processing for milk products must be done inside the country, with few exceptions. In short, milk products must be made exclusively in Switzerland in order to use Swiss designations. Mondelez International’s decision to move its production of Toblerone chocolate to Slovakia defies this exclusivity, and therefore, is no longer deemed “Swiss.” Although some Toblerone chocolate will still emanate from the Bern factory, in order to comply with this “Swissness” law, Mondelez International announced plans to replace the Matterhorn with a more generic mountain-shaped icon, and will instead state that the chocolate was “established in Switzerland 1908,” instead of being “of Switzerland.” Some may view this Swissness law as overly strict, but others, including the Swiss government, see it as necessary to protect the strength and reputation of its brand. Citing consumer surveys, the Swiss government as justified this legislation by claiming the value Swiss branding adds to goods is as much as 20% of the sales price, and nearly 50% for luxury goods. While the benefit to companies and goods manufacturers is clear, it is equally as strong for consumers, who can rest assured that products bearing the Swiss cross or “made in Switzerland” statements are, in fact, Swiss. Despite the fact its product packaging is changing and it may not be “Swiss” anymore, Mondelez has reassured Toblerone fans and chocolate connoisseurs alike that the recipe, taste, and distinctive product shape of the famous chocolate bars will stay the same.

From the initial design plans, to the choice and fabrication of materials, to the finished project, there are many components of a construction or infrastructure project that can give rise to intellectual property (“IP”) issues for construction and design professionals. Believe it or not, IP plays a key role in any construction project and is therefore something that anyone involved in the construction industry should be mindful of. This article provides a high-level overview of the broader IP categories that could impact your construction project or company. Trademarks In short, a trademark is a source identifier. A trademark consists of words, symbols, logos or other designations used to identify the particular source of goods or services. Trademark rights can be acquired simply by using the trademark in commerce, but registering the mark with the U.S. Patent and Trademark Office (“PTO”) confers additional legal benefits and can make for a smoother enforcement process. In the construction industry, trademark issues primarily arise with respect to contractor or subcontractor business names, project names, or joint venture names causing a likelihood of confusion. Because construction businesses often include the last name of the original owner, it is important to know that a trademark, which is “primarily merely a surname”, is considered a generally weak trademark and additional proof may be required to register and/or enforce it. Trademark rights can also arise in the names of buildings (e.g., Empire State Building®) as applied to real estate services or other services or goods, leading to disputes. The litmus test and the key to avoiding or addressing infringement is whether there is a likelihood of confusing your trademark with that of another. Copyrights A copyright protects works of original authorship fixed in a tangible medium. This includes project drawings, blueprints, written materials, technical designs, photographs, and even the finished building or project design itself. Copyrights provide the owner the exclusive right to use, reproduce, and to derive other commercial benefit from the protected work for a specified period of time. Copyright rights arise upon creation of a work; but, when registered in the Copyright Office, the owner of the copyright is entitled to pursue an infringement claim and can collect statutory damages and attorneys’ fees if registration is pursued early. Copyright issues can arise surrounding the ownership and right to exploit a particular work. Take for instance the project blueprints and building plans. The copyright in those building plans is generally owned by the author of the plan drawings, which often is the architect. The project owner will not be considered the author or owner of the plans and may run into an infringement issue, unless (1) the plans fall within certain categories of works and are subject to a written agreement assigning ownership from the original author to the project owner, or (2) the plans were prepared in the scope of the author’s employment, as an employee of the project owner. The key takeaway for construction and design professionals with respect to copyright issues is to be mindful of who is creating the copyrighted materials and who will be the ultimate owner of those materials, and to then be sure to obtain the appropriate written agreements documenting the nature and details of the parties’ relationship. Trade Secrets Trade secrets protect the confidential aspects of a business, such as business methods or information. Trade secrets can cover virtually any type of information that is economically valuable to the owner, not generally known to the public, and is the subject of reasonable efforts by the owner to maintain its secrecy. Common items protected as trade secrets are client lists, marketing strategy, pricing strategy and policies, certain contracts, and competitively sensitive information. Trade secrets are not subject to any sort of registration process. Instead, the owner of the trade secret must use non-disclosure agreements or other confidentiality measures to make sure these aspects of their business stay secret. Until 2016, trade secret jurisprudence and claims of misappropriation were governed solely by state and common law. However, the passage of the Defend Trade Secret Act (“DTSA”), 18 U.S.C. 1836, et. seq. has created a federal cause of action for trade secret owners, has broadened the definition of a trade secret, and provides expansive remedies, such as treble damages, attorneys’ fees, and civil seizure. The key takeaway here: if as a construction and design professional, you believe you have sensitive information of value that you want to protect as a trade secret, make sure you at least have appropriate confidentiality agreements and/or non-disclosure agreements with each employee or entity who may have access to that secret information and limit the universe of folks who have access to that information. Once that information is publicly known, trade secret protection ceases and the value of the previously-protected information diminishes. Patents Patents provide the owner with a temporary monopoly in the United States (or other countries in which the patent registration is granted) to make, use, or sell a patented machine, article of manufacture, process, method or other patentable invention. Unlike copyrights and trademarks, the PTO must grant patents before rights can arise. There are two types of patents: (1) a utility patent, which protects a machine or process that is new, useful and nonobvious and (2) a design patent, which protects any new or original design of an object. As a construction or design professional, a utility patent would protect a newly invented construction process, equipment, material, or business method that gives you a competitive advantage. However, the key takeaway here is when your team comes up with new ideas or discovery, do your research to make sure what you have come up with is different than what has already been used or discovered. If you are not careful, patent infringement litigation can be very expensive from both an attorneys’ fees perspective and a potential damages perspective. Managing IP Risks on a Project So now, you are probably thinking, “how do I protect my project or the work I’ve done and mitigate these infringement risks?” One answer is proper documentation. This means keeping detailed and organized records of every stage of the construction and design process, with the bulk of this work being done before you ever break ground on the project. All project-related entities and workers should be subject to appropriate contracts that should contain provisions addressing IP (such as who owns it, how it can be used and transferred, and dispute resolution) and confidentiality or non-disclosure (particularly for trade secrets) provisions. If separate agreements or licenses are needed, these documents should detail the categories of IP that are protected, what can be used, and who can use them without fear of infringement. Registration of that IP should also be pursued early. Further, any research conducted, processes developed, the dates of key actions, and recordings or documentations of meetings should detail who, when, why, where, and what was discussed or developed (particularly for patents). For instance, if an engineer team discovers or develops a unique and useful building process, keep detailed records about the steps behind that process, key dates, key documents or other memorialized work product, and the roles and contributions of the individuals on that development team. If you have meetings with others inside or outside of the organization, keep organized records concerning who attended, what was discussed, the dates and times of those meetings. The commercial value of your construction project is not just in getting the project completed, but also in the control of the ownership and/or use of the IP and avoiding infringement. It is important for construction and design professionals to take the time to consider these risks and put the right documentation in place now to avoid costly and preventable IP disputes in the future.

When I was a kid, we anxiously awaited Christmas Eve, with the exception of traditional lutefisk dinner. If you too have ingested lutefisk, you may agree that it is unpalatable. My Dad’s now family-famous quip was “just put more melted butter on it.” That quip went through my head while reading the Federal Circuit’s decision in Columbia Sportswear North America. v. Seirus Innovative Accessories. Just like adding more melted butter, the ability to add a logo to overcome a design patent infringement claim, is not palatable to the design patent bar or to design patent owners. Columbia Sportswear filed suit against Seirus in the Southern District of California, where it received a $3 million summary judgment with respect to the infringement of its patent in the above-featured design. Columbia’s design patent consists of the ornamental design of heat reflective material—a wave pattern featured in its body gear and sleeping bag products. Seirus released a line of gloves and other products with the above-featured wave design. The district court held that “even the most discerning customer would be hard pressed to notice the differences between Seirus’s HeatWave design and Columbia’s patented design,” and further characterized the presence of Seirus’s Logo as a “minor difference.” In its decision, the district court relied upon precedent established in L.A. Gear, Inc. v. Thom McAn Shoe Co., which held that logos should be wholly disregarded in the design infringement analysis. In reversing the district court, the Federal Circuit acknowledged that the premise of L.A. Gear is that “a would-be infringer should not escape liability for design patent infringement if a design is copied but labeled with its name.” But the Federal Circuit narrowed the application of that decision, indicating that “L.A. Gear does not prohibit the fact finder from considering an ornamental logo, its placement, and its appearance as one among other potential differences between a patented design and an accused one.” The court leaned on the Supreme Court’s decision in Gorham Co. v. White, which explained that “if, in the eye of an ordinary observer, giving such attention as a purchaser usually gives, two designs are substantially the same, if the resemblance is such as to deceive such an observer, inducing him to purchase one supposing it to be the other, the first one patented is infringed by the other.” The Federal Circuit reasoned that “a fact finder is tasked with determining whether an ordinary observer would find the ‘effect of the whole design substantially the same,’” and thus it is not proper to ignore elements of the accused design entirely. It then reversed and remanded the district court’s grant of summary judgment. So why do we care? Because from the perspective of the design patent bar and design patent owners, several of whom filed amicus briefs in conjunction with Columbia’s petition for rehearing filed this month, this decision “will likely have far-reaching and unintended consequences for design patent law…it threatens the integrity and reliability of the design patent system and jeopardizes the value of millions of design patents.” From that perspective, if a design is the only focus of a patent, should it not stand that the analysis in an infringement claim should be limited to the design and not additional elements? If not, then “Slapping a Logo on It” creates a path to readily overcome a design patent infringement claim on an otherwise infringing product, undermining the value and protection of design patents. We will provide updates in this case as they develop.

Many IP owners wonder what they need to do to ensure the continued protection of their EU trade marks and Community Registered Designs after Brexit. Some attorneys, since the referendum, encouraged clients to file in the UK to secure those rights. This would have been an expensive strategy. This week, the UK government gave some reassurance on this issue through a ministerial statement in Parliament that promised that these registered EU rights will become UK rights automatically and at no cost when the UK leaves the EU system. See the report on the CITMA website here. Contrary to most issues surrounding Brexit, this one does not depend on an agreement being reached between the UK and the EU. How to deal domestically with EU registered rights after Brexit is purely a matter for the UK. So this announcement is quite significant. The statement given in Parliament is not detailed but unsurprisingly the UK government wishes to ensure a smooth transition and as little administrative burden as possible which is best achieved by giving full effect in the UK to all EU registered rights, automatically. There are many technical questions that remain open and which may be answered, partially or fully, once legislation is published in this regard. First and foremost the question concerning EU applications that are pending on the cut-off date. Other legal issues include the rules on non-use and reputation, etc. in trade marks and issues such as the availability of prior designs in the market in connection with the novelty and individual character requirements for CRDs. I expect after Brexit the “naturalised” EU registrations will be treated as if they were always UK registrations and subject to normal rules under UK law that treat the UK territory as the relevant market. This seems to be the simplest solution. If so, some of those EUTMs (probably the vast majority of those more than 5 years old) that will convert automatically to UK rights may become vulnerable overnight to non-use challenges (if they were not put to use in the UK). There will also be some questions for the EU to resolve post Brexit, the most obvious one whether use of an EUTM in the UK before Brexit will be relevant for non-use challenges and for assessing reputation of an EU registration after Brexit. Hopefully, the EU will pass legislation in due course to clarify the position on these kind of issues. We will not have many more details for at least several more months, but this announcement puts to rest the key concerns regarding the effect of Brexit on registered EU rights.  

TheTMCA.com blog has had a busy first half of 2018 with a total of 62 posts so far this year. Thank you to our loyal readership, which keeps growing. In case you missed them, here are our top 8 posts of 2018 so far, with topics including the new GDPR privacy law, the Trump brand loss in a trademark license battle, music copyright issues and the large number of works entering the public domain next year. What's up with WHOIS? The GDPR May Limit or Prevent Access to Domain Name Registration Info Trump Brand Loses Trademark Licensing Dispute – Rules of Contract Law Prevail "Sleevey Wonders" are "Arm Tight" in California Lawsuit Tune Up: Initial Lessons from Gibson's Most Recent Trade Dress Lawsuit Adnan Syed Won a New Trial (Again), But the Serial Podcast Lost its Own Appeal Large Number of Works Set to Enter the Public Domain in 2019 Extra Foam, Please: Common Sense Prevails and Court Finds that Starbucks Lattes Contain Foam Did The 9th Circuit "Blur the Lines" in its Latest Music Copyright Case?

A new means for fighting back against copycats in the fashion industry is on the rise: online call-outs. Brands can take their grievances directly to the public on social media to draw attention to design imitations (and in the process educate consumers about authenticity). Posts like these are gaining significant traction in the fashion world, which is awash with intellectual property rights violations. Ironically, a fashion brand that vigorously polices infringements has become the namesake of one of the most visible online outlets for highlighting copycat fashion designs. The Instagram account @Diet_Prada (also tied to dietprada.com) airs the dirty laundry of fashion brands to its almost 600,000 followers by displaying side-by-side photos of copycat designs and similar originals, generating passionate comments from consumers and designers alike, and bringing bad press to the copycat design creators. In some cases, the implicated designers comment directly by issuing clarifying statements. The two fashion insiders who have now been identified as running the account – Tony Liu and Lindsey Schuyler – refer to themselves as “knockoff detectives.” In an interesting turn of events, on June 28, 2018, Diet Prada shared a photo of a shirt sold by Dolce & Gabbana (whose co-founder is an outspoken detractor of Diet Prada), which displayed the same hashtag as that used on a shirt sold by Diet Prada itself as merchandise with the caption “When ur merch gets knocked off by @dolceandgabbana for 12x the price lol. #pleasesaysorrytous”. Even where photos of copycat fashion designs are not flagged on Diet Prada’s accounts, Diet Prada has found itself in the middle of designer disputes. For example, in January 2018, the founder of active wear brand Outdoor Voices, Tyler Haney, accused another high-end active wear company, Bandier, of ripping off her designs. She pointed out the design similarities on her Instagram Stories, claiming: “Each new style in @bandier’s ‘new’ line is a rip of an Outdoor Voices style. . . . Embarrassed for you. People should boycott everything about you.” Some Outdoor Voices fans called for the Instagram account @Diet_Prada to step in and help. Fans also directly confronted Bandier on its social channels. When Bandier posted a photo of its new collection on Instagram, Outdoor Voices fans shamed the brand through their comments. One particularly irate fan even commented that “OV is coming to end you bandier”. The popularity of the Diet Prada platform shows that posting photos of a “ripped off” fashion design may be one potential PR strategy for fashion brands to take a stand against copycats. And in some cases, it could serve as a first attempt to shame a copycat infringer into pulling a product before embarking on costly and time-consuming legal action.

The women’s hosiery powerhouse, Spanx, is being sued for allegedly copying designs of a small shapewear company (R and A Synergy, LLC, v. Spanx, Inc., (C.D. Cal. 2017)).  In the Complaint filed on December 21, 2017 in the Western District of California, R and A Synergy claimed that Spanx copied the design of and advertising for R and A’s “Sleevey Wonders” product.  The twist here: R and A has evidence showing that Spanx ordered and received two pairs of Sleevey Wonders and had them sent directly to the office of Spanx’s CEO four years before Spanx launched its new products.  R and A Synergy is a small business that first sold its “Sleevey Wonders” in 2011.  R and A alleged that it spent several years on research and development to invent the “Sleevey Wonders,” a “unique [ ] sleeved garment specifically designed as a layering piece to wear under sleeveless and strapless tops and dresses.”  In 2009, R and A filed a trademark application for the mark SLEEVEY WONDERS and began filing a series of utility and design patents covering the undergarments.  Shortly after, R and A launched its Sleevey Wonders website, where it advertised and sold its products.  R and A alleges that “prior to the launch of the Sleevey Wonders under sleeves, no category of garment existed for slip-on sleeves made to wear under sleeveless and strapless tops and dresses that give the appearance of being part of the outer garment with which they are worn.” Fast forward to May 15, 2013.  R and A, which had been selling Sleevey Wonders in boutiques across the U.S., received an order from the assistant to Sara Blakely, CEO of Spanx, for two Sleevey Wonders products.  The order was shipped to Spanx’s headquarters in Georgia to Ms. Blakely’s assistant. R and A followed up, inquiring about whether Spanx had any interest in discussing a potential business partnership.  Spanx, however, had another idea.  To R and A’s dismay, Spanx debuted is new “Sheer Fashion” and “Arm Tights” products “as layering pieces to be worn under sleeveless garments” in September 2017.  According to the Complaint, Spanx’s Blakely claimed that Arm Tights filled a “white space” in the fashion industry that had never existed before, though it had two pairs of Sleevey Wonders sitting right in its offices. R and A further claims that Spanx had even gone as far as to copy several key advertising and branding elements from the Sleevey Wonders products, such as the use of illustrations of paper dolls wearing a sleeved under garment with various interchangeable outfits, a bullet-pointed list on the packaging, and the use of a mathematical equation to show that the products combine with other items to create new items.  R and A also points out interesting similarities in the branding slogans for each product: R and A asserts that like its use of the slogan “Made in the USA, with love” to advertise its product, Spanx also uses the phrase “#Madewithlove” to advertise its products.  R and A also asserts that “similar to the slogan of R and A, ‘Magically transforming your outfit into something NEW!,’ Spanx advertises [its] Arm Tights on its website and its product packaging using the slogan, ‘Transform your wardrobe!,’ and advertises its product as being magic.” According to the Complaint, after receiving a cease and desist letter from R and A, Spanx’s attorneys attempted to distinguish the products claiming that Spanx’s packaging and promotional materials are readily distinguishable from R and A’s and that Spanx’s products are “all in a pull-on style, whereas Sleevey Wonders [ ] products snap under the bust.”  R and A contends, however, that the packaging and promotion are nearly identical to one another and the original Sleevey Wonders are pull-on style, similar to Spanx’s products. R and A was not convinced and now pursues claims for copyright infringement based on Spanx’s alleged copying, reproduction and distribution of R and A’s marketing materials, such as the use of the paper doll illustrations, equations to show wardrobe expansion, and buzz words and slogans; trade dress infringement for the identical look and feel of the fabric design of the two products; false advertising; and federal and state unfair competition.  However, R and A makes no claim for patent infringement based on its utility and design patent applications. The outcome of this case will be interesting, as those in the fashion industry have long expressed their concern over the lack of intellectual property protection for unique fashion designs.  Technology has made it increasingly difficult for designers to stay ahead of copyists, who can immediately begin producing knockoffs and counterfeits, or, in this case, a direct competitor. The TMCA will keep you posted about further developments in the case!

On December 7, a federal jury in Los Angeles awarded $846,720 in damages to Unicolors, Inc. in its suit against H&M Hennes & Mauritz, LP for copyright infringement of a textile design. Unicolors, Inc. v. H&M Hennes & Mauritz L.P., Case No. 2:16-cv-02322 (C.D. Cal). Here is a comparison of the designs at issue that led to a finding of willful infringement: THE WINNING ARGUMENTS: Unicolors argued that it only needed to prove the “possibility of access” and substantial similarity in order to demonstrate infringement and that the possibility of access could be established by its widespread dissemination of its work (selling  over 40,000 yards of its pattern to numerous customers) before H&M sold its products.  Further, Unicolors contended that the two designs were “strikingly similar” – i.e., that similarities between the designs could only be explained by copying, rather than by “coincidence, independent creation, or prior common source.” Unicolors urged that small differences in the designs should be “disregarded,” because on the human form, small differences fade within a few feet of distance from the wearer, and that small differences in the designs could actually be evidence of willful infringement.  It also argued that H&M was reckless, if not willful, in continuing to sell the allegedly infringing goods after it was on notice of Unicolors’ claim. THE LOSING ARGUMENTS: In defense, H&M relied on the following theories: It did not “design, manufacture, distribute,” or have “anything to do with the creation or selection” of the allegedly infringing product; The design H&M used was protected by a Chinese copyright obtained in 2014 in China (and a U.S. copyright obtained in 2017); Unicolors failed to present “some evidence” of copying, pursuant to the Ninth Circuit’s decision in United Fabrics, International v. C&J Wear, 630 F.3d 1255, 1257 (9th Cir. 2011); To date, no court has permitted a plaintiff to rely on the “strikingly similar” doctrine where the accused design is protected by a copyright registration; The producer of H&M’s design provided “credible evidence” of its independent creative process, including a “written paper trail”; Unicolors did not have any evidence of prior access by either H&Ms or the designer (a Chinese entity) prior access to Unicolors’ design; and It had six-figure losses on the goods LESSONS FOR THE FUTURE: Although jury verdicts are often unpredictable, a few themes emerge from a review of Unicolors’ success: If you are on notice of a potential infringement, continuing to sell the products in dispute can lead to enhanced damages and a finding of willfulness; Cases involving textile designs can be hard to predict; although there may be only a narrow scope of protection, minor differences may not be enough to convince a jury that the designs are not substantially similar; and Evidence of independent creation must be credible and convincing.

When filing a utility patent that includes design elements, the patentee is often faced with the question “should I also file a design patent?” The patentee may answer with “there is no need to file the design patent since the design elements are covered by the utility patent.” However, a recent case in the United Stated District Court for the Southern District of California, Columbia Sportswear v. Seirus Innovative Accessories, illustrates that filing a design application along with a utility patent can have some very powerful and lucrative benefits. Columbia Sportswear owned three patents directed towards heat reflective lining of outdoor equipment. The three patents are U.S. Patent No. 8,453,270, U.S. Patent No. 8,424,119, and U.S. Design Patent No. D657,093. The reflective lining was used in Columbia Sportswear’s Omni-heat products. In January 2015, Columbia Sportswear sued Seirus Innovative Accessories, alleging that Seirus’ HeatWave gear infringed the three patents. During litigation, Columbia Sportswear filed a summary judgment motion arguing that Seirus infringed the three patents as a matter of law. The court dismissed Columbia Sportswear’s motion regarding Seirus’ infringement of Columbia Sportswear’s two utility patents. However, the court held that Seirus infringed Columbia Sportswear’s design patent. In particular, the court held that the designs of Columbia Sportswear’s design patent and the lining of the HeatWave gear were “strikingly similar” and, as such, met the requirement for infringement of a design patent. This leads to the first reason to file a design patent along with a utility patent: design and utility patents have different standards for infringement. For example, the owner of a design patent needs to demonstrate that an ordinary observer would find the two designs to be substantially the same to prove infringement while the  owner of a utility patent needs to demonstrate literal infringement or infringement under the doctrine of equivalents. The different standards for infringement mean, in some circumstances (as was the case for Columbia Sportswear), it can be easier or more straightforward to demonstrate infringement of a design patent than a utility patent. Before the case went to trial, Columbia Sportswear dropped U.S. Patent No. 8,424,119 from the suit. After trial, a jury found that Columbia Sportswear’s remaining utility patent was obvious in view of the prior art. This leads to the second reason to file a design patent along with utility patent: design patents and utility patents have different standards of obviousness. As such, as was the case with Columbia Sportswear’s patents, a factfinder can find that the utility patent is invalid while the design patent is valid. The jury also found that Columbia Sportswear was entitled to all of Seirus’ total sales for the infringing products, about $3.4 million. This leads to the third reason to file a design patent along with a utility patent: damages for infringing a design patent are different (e.g., can be greater) than a utility patent. Columbia Sportswear v. Seirus is the first court case to determine damages after the U.S. Supreme Court’s decision in Apple v. Samsung. 580 U.S. ___ (2016). However, as shown in this case, damages for infringement of a design patent can result in the patent owner receiving all of the total sales of the infringing product instead of just a reasonable royalty or lost profits as in the case of utility patents. Note that the damage analysis for design patents is fluid and therefore may change. In sum, it can be beneficial to file a design patent along with a utility patent because (1) it can be easier and/or more straightforward to demonstrate infringement of a design patent compared with a utility patent; (2) the design patent can be valid even though the utility patent is invalid; and (3) damages for infringing a design patent can be all of the total sales of the infringing product.